Correlation Between Heungkuk Metaltech and Korean Air
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Korean Air at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Heungkuk Metaltech and Korean Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heungkuk Metaltech CoLtd and Korean Air Lines, you can compare the effects of market volatilities on Heungkuk Metaltech and Korean Air and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Heungkuk Metaltech with a short position of Korean Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Korean Air.
Diversification Opportunities for Heungkuk Metaltech and Korean Air
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Heungkuk and Korean is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Korean Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Air Lines and Heungkuk Metaltech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Heungkuk Metaltech CoLtd are associated (or correlated) with Korean Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korean Air Lines has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Korean Air go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Korean Air
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 2.13 times more return on investment than Korean Air. However, Heungkuk Metaltech is 2.13 times more volatile than Korean Air Lines. It trades about 0.16 of its potential returns per unit of risk. Korean Air Lines is currently generating about 0.01 per unit of risk. If you would invest 471,500 in Heungkuk Metaltech CoLtd on September 12, 2024 and sell it today you would earn a total of 87,500 from holding Heungkuk Metaltech CoLtd or generate 18.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Korean Air Lines
Performance |
Timeline |
Heungkuk Metaltech CoLtd |
Korean Air Lines |
Heungkuk Metaltech and Korean Air Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Heungkuk Metaltech and Korean Air
The main advantage of trading using opposite Heungkuk Metaltech and Korean Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Korean Air can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Korean Air will offset losses from the drop in Korean Air's long position.Heungkuk Metaltech vs. Korea New Network | Heungkuk Metaltech vs. Solution Advanced Technology | Heungkuk Metaltech vs. Busan Industrial Co | Heungkuk Metaltech vs. Busan Ind |
Korean Air vs. Jin Air Co | Korean Air vs. Air Busan Co | Korean Air vs. Tway Air Co | Korean Air vs. Solution Advanced Technology |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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